DAX Market Analysis, September 2021

DAX Market Analysis, September 2021

den 14 september 2021

DAX crashed the historical August average performance of ca -2% by gaining ca +1.7% in August 2021! Level 16000 remained as a strong resistance and offered good positions for shorts as most weeks in Aug were negative although full month ended positively. First week in August delivered the gains and rest of the month we saw sideways movement in a range.

As mentioned last month, DAX has broken recent records on how long it has stayed above monthly exponential moving average EMA6 without testing it (EMA6 is now ca 14720) and as we did not see that happening in August either, the record is just getting longer. August did offer good short opportunities from 16000 level, i.e. there was plenty of sideways movement with good legs down for traders - but the big picture is stubbornly up. However underlying indicators were weakening a month ago and now in August we saw those indicators weakening further so DAX going south to look for support is quite possible in our opinion and we are waiting for the market to show that it is ready to go there.

Note: Past performance is not a reliable indicator of future results.

Long term levels of support: 14720, 15400

Long term levels of resistance:  16000

Weekly chart (below) shows the movement in August really well - all gains happened on first week of August and for the next weeks DAX went sideways with pullbacks bought. Once again, EMA6 and EMA12 levels were very important. EMA6 was tested on three consecutive weeks and week ended at or above EMA12 line so movement was close to 300 points per week. It often feels that for long entries, EMA6 and EMA12 lines are the best spots.

Note: Past performance is not a reliable indicator of future results.

Mid-term levels of resistance: 16000, 16300

Mid-term levels of support: 15700, 15800

For a long entry, weekly EMA6 and EMA12 levels are potentially good ones, especially EMA6. Similarly, 16000 level could be a possible good exit point as it has been a strong resistance for DAX to cross. EMA6 is currently at 15715 so one possibly good instrument for long entry would be TLNG DAX VT499 - it has quite a tight stop so a good approach could be to start with a small position and continue to grow it if the market moves to the right direction.

For a short entry, a good level could be 16000 as it has been a strong resistance and from there DAX could come easily down to the EMA12 line. For example TSRT DAX VT379 could be a good option here. .


Note: Past performance is not a reliable indicator of future results.

Historically speaking, September is almost as weak as August. But as we have now seen, in current market conditions historical averages have not worked well.

Above: McClellan oscillator continues to head down, signalling weakening market conditions

Above: Shares in DAX index split between those above and below their respective DMA20 averages. Also here it indicates that underlying fundamentals are weakening.

Above: Summary of technical indicators for DAX. View is mostly confusing and moving more towards ‘sell’

Note: Past performance is not a reliable indicator of future results.

Above: Average historical daily and weekly movement for DAX. Historically September is mostly negative.

Summary of world’s main futures: Here picture is still clearly more in ‘buy’ as what it is for DAX.

Important Notice

This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the securities, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. Past performance is not a reliable indicator of future performance.

2023-02-04 22:57:39


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